QUARTERLY REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2015

or

o

TRANSITION REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission
file number: 1-8923

WELLTOWER INC.

(Exact
name of registrant as specified in its charter)

Delaware

34-1096634

(State or other jurisdiction
of

incorporation or
organization)

(I.R.S. Employer

Identification No.)

4500 Dorr Street,
Toledo, Ohio

43615

(Address of principal
executive offices)

(Zip Code)

(419) 247-2800

(Registrant’s telephone number, including area code)

Health
Care REIT, Inc.

(Former
name, former address and former fiscal year, if changed since last report)

Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes ☑ No o

Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such files). Yes ☑ No o

Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See the
definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☑

Accelerated filer o

Non-accelerated filer o

(Do not check if a smaller reporting company)

Smaller reporting company o

Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes o No ☑

As of
October 23, 2015, the registrant had 353,879,510 shares of common stock
outstanding.

NOTE: The consolidated balance sheet at December 31, 2014 has been
derived from the audited financial statements at that date but does not include
all of the information and footnotes required by U.S. generally accepted
accounting principles for complete financial statements.

See notes to
unaudited consolidated financial statements

3

CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME (UNAUDITED)

WELLTOWER INC. AND SUBSIDIARIES

(In
thousands, except per share data)

Three
Months Ended

Nine
Months Ended

September
30,

September
30,

2015

2014

2015

2014

Revenues:

Rental income

$

409,290

$

354,148

$

1,185,502

$

1,038,451

Resident fees and services

545,255

482,412

1,573,318

1,406,316

Interest income

22,380

9,344

59,950

26,871

Other income

2,072

1,619

11,572

4,139

Total revenues

978,997

847,523

2,830,342

2,475,777

Expenses:

Interest expense

121,130

118,435

361,071

360,334

Property operating expenses

408,703

355,157

1,183,519

1,040,342

Depreciation and amortization

205,799

200,970

603,431

648,737

General and administrative

36,950

30,803

110,562

115,327

Transaction costs

9,333

13,554

70,379

21,546

Loss (gain) on derivatives, net

-

49

(58,427)

400

Loss (gain) on extinguishment of debt, net

584

2,692

34,872

3,075

Impairment of assets

-

-

2,220

-

Other expenses

-

10,262

10,583

10,262

Total expenses

782,499

731,922

2,318,210

2,200,023

Income (loss) from continuing operations before income taxes

and income from unconsolidated entities

196,498

115,601

512,132

275,754

Income tax (expense) benefit

3,344

10,198

(3,769)

6,369

Income (loss) from unconsolidated entities

(2,631)

(2,632)

(18,231)

(19,705)

Income (loss) from continuing operations

197,211

123,167

490,132

262,418

Discontinued operations:

Gain (loss) on sales of discontinued properties, net

-

-

-

6,411

Income (loss) from discontinued operations, net

-

-

-

724

Discontinued operations, net

-

-

-

7,135

Gain (loss) on real estate dispositions, net

2,046

29,604

249,002

36,272

Net income

199,257

152,771

739,134

305,825

Less:

Preferred stock dividends

16,352

16,352

49,055

49,057

Less:

Net income (loss) attributable to noncontrolling interests(1)

862

164

4,666

(1,339)

Net income (loss) attributable to common stockholders

$

182,043

$

136,255

$

685,413

$

258,107

Average number of common shares outstanding:

Basic

351,765

311,117

346,425

299,137

Diluted

353,107

312,812

347,547

300,645

Earnings per share:

Basic:

Income (loss) from continuing operations attributable to common
stockholders, including real estate dispositions

$

0.52

$

0.44

$

1.98

$

0.84

Discontinued operations, net

-

-

-

0.02

Net income (loss) attributable to common stockholders*

$

0.52

$

0.44

$

1.98

$

0.86

Diluted:

Income (loss) from continuing operations attributable to common
stockholders, including real estate dispositions

Welltower Inc. (formerly Health Care
REIT, Inc.), an S&P 500 company headquartered in Toledo, Ohio, is driving
the transformation of health care infrastructure. The company invests with
leading seniors housing operators, post-acute providers and health systems to
fund the real estate and infrastructure needed to scale innovative care
delivery models and improve people’s wellness and overall health care
experience. Welltower™, a real estate investment trust (REIT), owns 1,414
properties in major, high-growth markets in the United States, Canada and the
United Kingdom, consisting of seniors housing and post-acute communities and
outpatient medical properties. Founded in 1970, we were
the first real estate investment trust to invest exclusively in health care
facilities.

2. Accounting
Policies and Related Matters

Basis of Presentation

The
accompanying unaudited consolidated financial statements have been prepared in
accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for
interim financial information and with instructions to Quarterly Report on Form
10-Q and Article 10 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by U.S. GAAP for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the nine months ended September 30, 2015
are not necessarily an indication of the results that may be expected for the
year ending December 31, 2015. For further information, refer to the financial
statements and notes thereto included in our Annual Report on Form 10-K for the
year ended December 31, 2014.

New Accounting Standards

In May 2014, the Financial Accounting
Standards Board (“FASB”) issued ASU No. 2014-09, “Revenue from Contracts with
Customers (Topic 606)” (“ASU 2014-09”). The standard is a comprehensive new
revenue recognition model that requires revenue to be recognized in a manner to
depict the transfer of goods or services to a customer at an amount that
reflects the consideration expected to be received in exchange for those goods
or services. ASU 2014-09 is effective for fiscal years, and interim periods
within those years, beginning after December 15, 2017, and early adoption is
permitted beginning after December 15, 2016. We are currently evaluating the
impact that the standard will have on our consolidated financial statements and
have not yet determined the method by which we will adopt the standard.

In February 2015, the FASB issued ASU
No. 2015-02, “Consolidation (Topic 810): Amendments to the Consolidation
Analysis” (“ASU 2015-02”), which makes certain changes to both the variable
interest model and the voting model, including changes to (1) the
identification of variable interests (fees paid to a decision maker or service provider),
(2) the variable interest entity characteristics for a limited partnership or
similar entity and (3) the primary beneficiary determination. ASU 2015-02 is
effective beginning January 1, 2016. We are continuing to evaluate this
guidance; however, we do not expect its adoption to have a significant impact
on our consolidated financial statements.

In April 2015, the FASB issued ASU
No. 2015-03, “Simplifying the Presentation of Debt Issuance Costs”(“ASU
2015-03”), which requires that debt issuance costs related to a recognized debt
liability be presented in the balance sheet as a direct deduction from the
carrying amount of that debt liability. The recognition and measurement
guidance for debt issuance costs are not affected. Upon adoption, we will
apply the new guidance on a retrospective basis and adjust the balance sheet of
each individual period presented to reflect the period-specific effects of
applying the new guidance. The guidance is effective beginning January 1,
2016. We are continuing to evaluate this guidance; however, we do not expect
its adoption to have a significant impact on our consolidated financial
statements.

3. Real Property
Acquisitions and Development

The total purchase price for all properties acquired has been
allocated to the tangible and identifiable intangible assets, liabilities and
noncontrolling interests based upon their respective fair values in accordance
with our accounting policies. The results of operations for these acquisitions
have been included in our consolidated results of operations since the date of
acquisition and are a component of the appropriate segments. Transaction costs
primarily represent costs incurred with property acquisitions, including due
diligence costs, fees for legal and valuation services and termination of
pre-existing relationships computed based on the fair value of the assets
acquired, lease termination fees and other acquisition-related costs. Certain
of our subsidiaries’ functional currencies are the local currencies of their
respective countries. See Note 2 to the financial statements included in our
Annual Report on Form 10-K for the year ended December 31, 2014 for information
regarding our foreign currency policies.

8

WELLTOWER
INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
STATEMENTS

Triple-net Activity

Nine
Months Ended

(In thousands)

September
30, 2015(1)

September
30, 2014

Land and land improvements

$

111,674

$

36,427

Buildings and improvements

1,025,232

303,273

Acquired lease intangibles

3,888

-

Restricted cash

6

-

Receivables and other assets

60

-

Total assets acquired

1,140,860

339,700

Accrued expenses and other liabilities

(2,447)

-

Total liabilities assumed

(2,447)

-

Non-cash acquisition related activity

(2,780)

(1,937)

Cash disbursed for acquisitions

1,135,633

337,763

Construction in progress additions

96,403

79,668

Less:

Capitalized interest

(4,453)

(3,258)

Foreign currency translation

73

116

Cash disbursed for construction in progress

92,023

76,526

Capital improvements to existing properties

35,042

14,375

Total cash invested in real property, net of cash acquired

$

1,262,698

$

428,664

(1) Includes acquisitions with an aggregate purchase price of
$844,298,000 for which the allocation of the purchase price consideration is
preliminary and subject to change.